What is luxury? Amex forum speakers discuss its many forms

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NEW YORK -- The concept of luxury is apparently more elusive than the money needed to buy it.

Looking at the numbers first, the average income among readers of American Express upscale Departures magazine is $380,000 a year, and their net worth averages $2.4 million, according to the magazines vice president of marketing, Erica Kasel, who defined the luxury market at income of more than $250,000 a year.

Departures readers are American Express Platinum and Centurion cardholders, and there are 880,000 in the U.S., with another 200,000 overseas.

Reader survey statistics are averages, and they allow Kasel to say things like this: Wealthy travelers love the wine lifestyle because one-third of the publications readers reported in recent research that they had taken trips to wineries and vineyards in the previous 12 months.

Forty-two percent said they aimed to visit wineries and vineyards in the coming 12 months.

But those are averages, too. Christopher Sanderson, creative director of the Future Laboratory in London, argues there is no such thing as the standard luxury consumer.

Kasel and Sanderson were addressing American Express annual forum for hotel participants in the Fine Hotels & Resorts program the company offers to holders of its premium cards.

More spending cash

Sanderson also highlighted the spending money available to growing numbers of travelers when he said, The world is getting richer.

With more money around, Sanderson said, luxury is available to more people, and that produces masstige, or mass-market prestige.

The old luxury brands are now masstige. This is part of a deliberate desire of sellers to be available to more, but luxury is then devalued as a term, he said.

Therefore, relying on traditional research and one-on-one interviews, the Future Laboratory set out to define new luxury, Sanderson said.

New luxury, he said, means things like innovation, experience, values, emotion, wonderment and culture.

It is not just about how much money one has, he said, but about knowing how to be a discriminating spender. The new-luxury crowd is more interested in the experiences money can buy, he said, than in the older notions of service or in tangible goods.

Add to this the element of boredom.

The wealthy get bored a lot of the time, Sanderson said. We have to work harder at entertaining our customers.

Theater is a good model, he continued, and our role is to guide consumers through the luxury experience.

To illustrate the point, he said the Faena Hotel + Universe in Buenos Aires employs an experience manager.

In another shift, he said, American Express sees luxury travelers wanting hotels to be more like their homes. As examples, he said Soho House and 40 Bond in New York respond to that impulse.

The eco-hotel star also is rising, he said, as wealthy, experience-focused buyers sample barefoot tourism and look for the ascetic, clean and simple choices.

Gone are the days when funny little notes about towels salve consciences, Sanderson said.

Outside the hotel, he continued, similar impulses translate into requests to dine in local homes. The consumer asks hotels to arrange this, he said.

At the high end for this kind of travel, Sanderson said, American Express finds glamping, or glamorous camping.

So-called culture hotels are hot, he continued, whereas boutique hotels are so last century.

In the new genre, he cited the Hotel Fox in Copenhagen, which was designed by 21 artists to effectively create a hotel as artwork.

Fashion designers are in this business, too. That is an easy jump, Sanderson said. Hoteliers should be able to visualize the clothing that reflects your brand, he added.

Then there is fractional luxury, otherwise known as timeshare, for those who cannot afford a full-blown life of luxury.

As examples, consumers buy shares in clubs or yachts, Sanderson said. In addition, new $1.5 million Lear jets are likely candidates for fractional ownership, he said.

Sanderson also cited GuestInvest, which allows luxury aspirants to buy hotel rooms in London, rooms they can use as they wish but rent out the rest of the year.

Flashpacking, referring to backpackers who stay at five-star hotels at points in their trips -- fits in the category, too.

Even those with more moola than they spend are discovering a new austerity, Sanderson said. Wealthy buyers are more measured in their spending, producing conspicuous abstention.

As attitudes toward money and travel evolve among the wealthy in the developed world, rich people in the BRIC countries (Brazil, Russia, India, China) are moving toward glitz, Sanderson continued. We will see a polarization in how luxury sellers talk, he predicted.

Finally, to remind sellers who is boss, Sanderson urged people in the audience to type in their companys name at a search engine, followed by sucks.com.

There, he promised, you will find your best critics.

To contact the reporter who wrote this article, send e-mail to Nadine Godwin at [email protected].

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